LandAmerica Financial Group Inc. (LFG) has signed a definitive stock purchase agreement for the sale of the company's two principal title underwriting subsidiaries, Lawyers Title Insurance Corp. and Commonwealth Land Title Insurance Co., as well as United Capital Title Insurance Co. to Fidelity National Title Insurance Co. and Chicago Title Insurance Co.
In order to facilitate the closing of the transactions under the stock purchase agreement and protect the LFG's remaining assets following the recent announcement of the termination of its 1031 exchange business, LFG and subsidiary LandAmerica 1031 Exchange Services Inc. have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond, Va.
None of the other businesses of LFG are seeking bankruptcy protection.
On Monday, the Nebraska Department of Insurance filed petitions for rehabilitation for Commonwealth and Lawyers Title under the Nebraska Insurance Code.
LFG says it expects that rehabilitation orders will be entered quickly and that the rehabilitations will function as a temporary administrative step to assist the transition of Lawyers Title's and Commonwealth's businesses to the family of companies owned by Fidelity National Financial Inc. (FNF).
Under the stock purchase agreement, Fidelity and Chicago Title will pay the LFG $298 million in total for Commonwealth, Lawyers Title and United. The closing of the transactions under the stock purchase agreement are subject to approvals by the bankruptcy court, the Nebraska Department of Insurance, and other state and federal regulatory agencies. The company intends to work with FNF toward a closing as early as late December and will request expedited approval from the bankruptcy court.
‘I am deeply disappointed over the need to file for bankruptcy protection for the LandAmerica holding company and the 1031 company," says Theodore L. Chandler Jr., LFG's chairman and CEO. "However, this sale of our principal domestic title operations to Fidelity National in this coordinated Chapter 11 filing and Nebraska rehabilitation action offers our stakeholders the best result available in this brutal real estate, credit and capital market environment.’